tv Mad Money CNBC June 27, 2013 6:00pm-7:01pm EDT
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negative territory because of the conference call. the company saying it sees lower china revenues in the first quarter. that's certainly a negative. gross margins will be essentially flat as well. two things the street didn't want to see. grasso, give me a ticker. >> micron. >>all-state. >> i am scott wapner. mad money starts now. >> my mission is simple. to make you money. i'm here to level the playing field for all investors, but there's always a work somewhere and i promise to help you find it. mad money starts now. hey, i'm cramer. welcome to "mad money." other people want to make friend, i'm just trying to make money. call me -- one week ago, i adopted a radical position. froms i went on this show as
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well as the "today" show and said into the teeth of selling, it's worse to stay in the selling. >> thursday's losses wiped out all the gains from may and june. >> interest rates are going up. it is nothing worth panicking over. >> those -- >> 500 positive points in the dow. looks like a no brainer. when you look at the tape today especially after the last couple of sessions. 2% and nasdaq, but it sure wasn't easy to do. so smart. what could have been by proprietary insight? i didn't have it. all i had was discipline.
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sent yields on a journey to 3%. almost where they were earlier. i, too, was fearful. they got the data wrong. i fretted about the collapse in china. that was no different. but my philosophy is that no one ever made a dime panicking. acting emotionally. it has always been a loser for as long as i've been in this. spanning three decades. sure, this could be only the third time in that period where it made sense to panic. second being ahead of the bank stock obliteration. it has always paid to take a deep breath, examine what could go right. not just what can go wrong like everybody else, and sit tight. while waiting for better selling stocks. namely by a serious tight inning that might be upon us. you got stronger data, now, a week later, what does the stock market look like?
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i think it's starting to sort through the carnage. more important, buyers are scrutinizing the actual piece of merchandise. it's time once again. what are they saying? take today's action. start with conagra, has been innovating and acquiring with this most recent deal. this brand as well as top of the line product label brands reported an excellent number. terrific guidance. why is it so important? because it's precisely the bond equivalent stock from last week. 3% dividend. yield. which suddenly wasn't enough considering the risk of owning a stock versus the ten year. now, we see if they can play offense as well as defense.
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shows there's still hope for noncyclical companies. here's a household that runs both in harmon, the drugstore change my daughter and i fancy. with we know that retail's a big word. if it keeps going higher, that ensures consumers spend. but bed bath which was done an astounding 25 this year, revision downward expectations, typically the kiss of death, stock is basically up 15 cents. how about western visual to commodity companies smash up your computer. you'll see one that came alive when a brokerage house. of course in keeping with the new normal, kd holmes and -- reported fantastic numbers. the buyers didn't want them.
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housing -- closed down 19 cents. holy cow. a month ago, it would have rallied three cents. what happens now? the group will be struggling for the rest of the year. we also have the stocks that are doing nothing. are the markets going to take out its old highs, something stanley says seem possible. we've seen it go down. change the world, here's the bottom line. last week was right. remembering that no one ever made -- was correct. except even that discipline trumps emotional conviction. there are higher prices than a week ago. if you so choose, that is if you stay in the game and only if you stay in the game. stick around, what a show we've
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got tonight. >> coming up, united we stand. these industry icons serve up your morning joe, dress america and help you get to work and they're all showing the world that red, white and blue still means business. don't miss cramer's exclusives with the ceos of starbucks, macy's and ford. when the invest in america series continues. flying is old hat for business travelers.
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>> yes, i found a lot of cute things at macy's. >> the nation's biggest department store. >> all week, we've been investing a in america. a department store chain that is macy's that you just saw. what a terrific way -- reingented. the chairman and ceo of macy's. look, we can talk about what how sales were last week. i don't care. i'm talking about how you reinvented it and you come up with something, m.o.m. this is how you get a 2017, 2017
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take of huge numbers. talk about my macy's on the channel, make the connection, m.o.m. >> my macy's. this is something we have exclusively. very hard to get in business today, that is an organization structure that includes about 20 people living in 69 cities around the country. they are guiding our decisions on a local level, so the buyers that live in new york city, they're the largest buyer of everybody we sell. ralph lauren, calvin klein, but the decisions about what we buy from ralph lauren or calvin klein varies by location. in brooklyn, they're looking for larger sizes, more muted colors. if i go to queen, looking for something quite different in flushing. so getting it right on a local level and the detail level, that's what my macy's is all about. >> i don't know you don't mention come ppetitors, but if o
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into my competitor, largest discounter, they want you to form it. >> easy. not only is easy, ds almost impossible to do it other than the way they do it because we have the people living in those marketplaces, plus, the technology to help guide those decisions. that's huge. that's the "m." >> the enemy is inventory. no one's been ever to solve it. you may have a solution. >> we may. first of all, agree with you. when you have 800 macy's department stores out there, trying to get it right, have the exact sleeve length in the right color in every store, it's very complicated. i think we do a very good job because of what i just described. at the same time, if i don't get it right, i use the o. i've allowed the locations to
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ship to consumers. i love that idea. because if it's not selling in memphis, tennessee, that's where i'm going to pull it from because i'm going to avoid a potential markdown in the feature by pulling the slowest selling store. so i love this omni channel enabler. >> not big metropolitian areas where they have something. >> right. but also, jim, they just sell different things at different times. whether it's impossible for us to predict, we've seen what's happened around the country this year. if i have normal weather in the south, i can pull it from the north and send it to the south and sell it. this is a real enabler for us. the o in m.o.m. >> now, you're doing something here that i thought would always be impossible. retail sales grew. understand how to make a connection one-on-one with cu
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customers. >> right. >> i think you know, the bigger you get, the more difficult that becomes to do and i think it's essential r for the future. i think customers want to be treated as individuals, not as groups or categories. this localization effort we have to focus on is critical to that. the second m is about my macy. about magic selling and magic selling is really that connection with the sales associate to the customer. actively listening to their needs and becoming more knowledgeable about the product and then making that transaction, whether selling it there or through an omni company. >> your company always says it. for instance, last quarter, the budget conscious person is challenged, but also, some of the high-end, particularly women's sales customers are challenged. you know that from these people, you look at the tickets from the end of the day. you've got to best view of the
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psych e. >> we get regularly contacted by the white house. it ends up on how the consumer is performing. we've got a lot of access to that. not by household income group, but by part of the country. >> did you tell the president last week? >> he didn't call. but we do try to be as helpful as we can about trends and that's where i'm get iting that information when we announced our third quarter earnings. that is that lower household income consumer is definitely impacted by the payroll tax. so they're making harder decisions. do i buy gasoline in my tank, food on my table or shoes for my kid. >> that trade off, at the same time, you feel confident enough to be hired. >> listen, for what it's worth,
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the macy's product is really aspirational to a lot of those cu customers and so, we sit in that place where as i said, we are the largest seller of almost every brand that you could name in the apparel industry or footwear industry, so we have that aspirational part of our business. >> this footwear industry is curious for me. nike just wrote a good quarter. finish line. these stores treasure ground. do you feel that confident that you're going to let their sales people into your atmosphere? >> it's working. my out of the box is very, very good. we did not do a very good job with athletic footwear for men and women. zero with kids. part of it was the better relationships. we just didn't have it with nike. we were an afterthaukt. we never got the best sellers until late. that was wrong. we can't be that way, so we
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decided to do a joint venture with finish line. they get all great shoes. >> but you convert careful to open and close. when do we flip? when is the goal to have 1,000 stores. >> ask me this question five years and you probably did, i was wondering, do i have too many stores? now that they're fulfillment center, i'm doing just fine. i'm in 45 states, multiple centers that i want to be in. there's a couple i'm working in. there won't be 100, but i'll continue to open stores. >> i go to pittsburgh now on friday night. they are, they've worked -- bow
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ties in raleigh. so what you're saying is that my macy's is now gotten the level of -- 50% margin that people think you're going to top at. this is a long lasting thing. >> third inning, people say where are you in terms of my macy's execution. i changed my mind. i'm back in the dugout. as i said, i go to stores every week and i bring my -- i bring my chief marketing. we can all see it together because that's where it happens. in the stores. and i say you know what? look what this store is doing. why are we doing that in rale h raleigh? why weren't we doing that in brooklyn? >> the parade, america's conscious, america's dream, macy's. >> don't forget about the fireworks coming up. it's a fantastic national
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commercial for macy's for this year's being extended for two hours. >> okay, the chair and president, ceo of macy's. fabulous company. >> coming up, groomed for succe success? the single store in seattle to more than 18,000 locations around the globe. starbucks is now the world leader in serving premier cups of joe. but can its growing assortment of menu items keep the customers coming? don't miss cramer's exclusive with the ceo as our invest in america series continues. we're cracking down on medicare fraud.
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it came public. if you bought 6,000 share, you have an investment worth $1.25 million. how great is business? well, our next guest will credit his entire team because i know him, the success does indeed start at the top, which is why i'm thrilled that the ceo of starbucks in the studio. thank you so much for joining us. >> thanks for the introduction. >> of course. i'm not going to be restrained by the four walls. i want to talk about doing good and making money and how the real secret of starbucks success is how you treat people. >> i'm glad you asked me that because the bottom line is just a goal. but the question is, how do you get there? i think for us, going back to the late '80s before we were a public company, when we were dreaming about a national brand, we set the foundation and created a business model that was not better than anyone else,
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but it was different. that was asking the question, how do you create balance between profitability and a social conscious? it began with health care for every single employment, as well as stock options for every employee who works over 20 hours a week. >> which is part time. >> and as a result of that, the essence of starbucks success and equity of the brand was really built inside out, not consumer facing first. but from the culture, the values and guiding principles and we said we can't exceed the expeck tases of our customers unless us as leaders and managers exceed the expectations of our people and that's how starbucks was built. >> okay, but that does not just come from the business 101. that comes from at home 101. that is from something you were taught by your mom and dad. >> i would say all of us have experienced things as a kid. i grew up in the projects.
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i saw the fracturing of the american dream and i wntsed it. i still have the scars today. i could stand here today and say success has changed me, but the truth is, i still have the same fear of failure that i had as a kid and what drives me is trying to create the aspiration and business model, that my life story can be your life story, that you can start with nothing in america like i did and my family did and create the american dream and i think the other thing i'd say is that we've learned great lessons. that is success is best when shared. profitability is a shallow goal if it didn't have a real purpose and the purpose has to be to share the profits. we're really proud of that, but equally proud of what we're doing in the community, what we're doing with our people and how the company has built itself around a purpose. it's not just about making money. >> and that could be why you make the most money of people in your sector.
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>> you know, i've been saying for years as a public company, and people wouldn't listen at first because i think performance was based on the fact we had to demonstrate that we could perform. i think the shareholders understand that starbucks is a very different kind of company. sf >> back to what you said about insecurity. it's still out there. i remember a year and a half, you were saturated. too many stores in america, but the stores you opened last year are most successful. >> about two and a half years ago, the same people who probably hated the stock at $8, love it at 65. but the point is that we had to believe in our brand, in our purpose and our business model and what we've demonstrated in the u.s. alone is that the stores we've opened in america, about 500 in the last two and a
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half years, are the best performing storms in a decade. while we have opened thousands of stores internationally. just come back from india, vietnam and malaysia where starbucks is just as hot as any brand you can find. it's because of the way we've built the company and the reputation that starbucks has. >> how do you keep inventing? in a recent talk, you talked about the idea that when i look at the original dow 30. only one company remains during sustainable business. you have to change every single week, month, day. >> our aspiration as a company and i think this is not difficult to say, but it's some people will hold me accountable for it is we want to become one of the most recognized, admired and respected companies in the world. that's why i use ge, the dow 30. >> the other day, you said that you want to be the only one, but you said you were given
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hyperbole. >> we have to push for innovation in everything we do and we have to be locally relevant in every country we do business, but we also have to be highly relevant in the communities that we serve and for our people. the culture and values and guided principles of the company is what will sustain it. >> you've also become a technology company. i am going to hold this up because i happen to have one of these. you're too modest. >> i love that ad. >> this is the ad in today's paper and i happen to have the peach green tea lemonade and it's just really fabulous. but you're inventing, also taking advantage of the seismic shift in the way the american consumer, you say that they're just smarter. >> there's no question that there's a seismic shift in consumer behavior mainly because of technology and the mobile platform and we've invested heavily in capability and resources and today, starbucks
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is the number one consumer. we process almost 4 million mobile transactions last week. but the question is, what does that mean? meaning is we're giving value to our customers in terms of speed of service and doing things for them that enhance the experience, so innovation is not only on products and development, but starbucks today and i would say this for any consumer retail development company in the world. we have to be as relevant where people are working and playing and in our scores. cracking the code on that means that we have to be as innovative outside our stores. >> howard, you say that's today. ten years from you, how about this? a three concept international retailer. coffee, tea and juice. food for each day and china as its largest market. >> that's true. we have 1,000 stores in china today. we'll have thousands in the future. we're going to have thoughs of
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stores in india. we're the first retail company and consumer company to have wholesale stores and cpg. we just -- which has 300 mall stores. we think we can build additional stores. i would say this. that despite the fact we've been public for 20 years and in business for plus 40, that starbucks coffee company is in the early days of its growth and development. i will say there's significant challenges and this is not an easy thing to do. to build the kind of brand that starbucks has built. our aspiration and our hunger and appetite is stronger today than ever before. >> certainly believe that. you run lean and hungry. now, i go social, too, and what do people ask me, how could they put through a increase when coffee prices are full? >> fair question. coffee prices have fallen. the truth of the matter is it's
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about 11% of our total costs of goods. all these things. >> health care, you have been pointed in saying it's going to be tough. >> the increase is only 1%. it's not on all beverages. if you're a starbucks gold card holder, you will be able to get value. in today's world, if you want to be a great company, the currency has got to be transparency. okay, now, i want to talk just in the time we have left. the primary values of starbucks and what they stand for in terms of being an american. >> i tell all your people to stay humble and be hungry. but our values are this. we are a performance-driven company through the lens of humanity. >> you know, i got to get my head around that. >> we are a performance-driven company. we have to make profit.
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we want to drive revenue and profit through the lens of humanity. we want to have a conscious. >> thank you so much. that's howard schultz, chairman and president ceo of starbucks. you see why a like the company and the man so much. >> it was an honor. stay with cramer. >> coming up, in the driver's seat? the automaker that gave us the model t more than a century ago is still putting american muscle on highways around the globe and the ford motor company is burning rubber. racing more than 50% over the past year. cramer sits down with the ceo when "mad money"'s invest in america series continues. i want to make things more secure.
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without touching the auto industry. a segment of our economy that's going really strong. and my favorite auto company it's real clear, my travel trust owns it, the ford motor company. it's run superbly by alan malawi, the company's president and ceo. come on in. have a seat. you once explained to me a concept and it does not lend necessarily to the way wall street likes to think because they're just trying to figure out what's the next penny. profitable growth for all and how that is ford's success.
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it is a long-term thing for ford. >> absolutely. really goes back to henry ford. i remember when you celebrated it, when you found that ad in 1925. took out this advertisement in the saturday evening post and explained he wanted to open up the highways to all mankind so everybody could participate. everybody could have great cars and trucks, also, great jobs, so everybody would grow. >> that's still working for ford. you've got cars that are affordable, that are smaller, that you make money on. that so is workers make money, that don't use a lot of gas. >> absolutely. remember and you covered this so well. we made a commitment six years ago and we're going to serve all of our customers around the world. with a complete family of vehicles. and we made that commitment, quali quality, fuel efficiency, safety. and then we used all the available technology and
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promised our customers! okay, do i envision a ford that say five years from now, the united states isn't as important, but china? >> clearly, the world is a different situation around the world. united states, very strong market. south america, north america, canada, europe, tough time right now, but we're restructures now. >> you've gotten -- we will not be disappointed. >> and we've accelerated production of all the vehicles, so we're increasing share. china's the largest market in the world. we're putting in production capability, plus, producing all new vehicles. i think the answer to your question is wanted to operate anywhere around the world, we wanted to be part of the fabric in addition to making good cars and trucks, so every vehicle we make, we can offer all the vehicles we make. >> you're putting up how many
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fa factories in china right now? >> seven. seven in asia pacific and covering the country and also, their excitement for the different vehicles, we thought we'd have small suvs, but i think they just absolutely loved that ford lineup. >> let's talk trucks. you've got some numbers today. >> what kind do you have now? >> i bought a ford 350. >> jim, you'd like to talk -- >> we run and it, if you're a small business person, you need a truck. >> absolutely. >> is that what actually -- housing, what correlates with these incredible sales? how can you have sales better than the last several years? >> data says that p perfectly correlatable with the gdp and that goes in a big way with houses. it supports economic development.
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for 37 years and so, it is coming back strong. the may year over year sales is nearly 31%. >> what's the secret here because we've seen styles come and go. we've seen cars be strong and be weak. what's the secret of the f-150? of the f series? >> i think it's been this laser commitment to the consumers because it's such an important vehicle. keep improving it year after year. absolutely. today with my sports version, which people are absolutely going to love. it clearly is the center piece, but when we made that commitment to have a full family of vehicles, on all the vehicles from the fiesta up to the f series. with. >> you've been really the most thoughtful intellect about what people want in a car, so i'm just going to go down. do they want style, fuel economy? is it cost or is it this tech
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initiative that you've told me about that i didn't believe? i didn't think it would really up sell sales, but it is. this is one of the neat things about strategy. and in our case, we decided to focus on qualify, fuel efficiency and low emissions. and then the smart pillar. the smart pillar, we talked about it. people would be worried about one eye off the road. >> and we took a point of view, connected world, car, we're going to have our smart device, one integrated life. that's where we worked with microsoft, your hands are on the wheel. voice activated. your eyes are on the road. it's turned out to be so popular because people want it because they have an integrated life now. i saw a headline, ford, the
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mobile app of choice. >> i like that. >> now, you have to deal with the economy. i know memorial day weekend, you put out some fabulous stuff, but those folks who say this morning, that since the fed moved, sales got a little softer. is that just moment tear headline risk? >> i think it's near term because we are part of a very large transformation. in our economy. because we've got the economy going now, we're managing the interest rates, managing the rest of the economy. so, i think there's going to be a time where there will be fallback from the stimulus. >> more incentives that you have to offer? >> i don't think so because we got the economy going. they value the trucks and the cars and the average age of vehicles today is nearly 11 years old, so when you buy a new car today, you can obsolete your older vehicle. >> one of the things that you told me was, i have a place in mexico, it happens to be right
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next to a new bmw plant. new japanese plant and close to gm engine. i think that's a shame, but that's the way it is. what's the difference between building a car, shipping it up by union pacific. you should if you want profitable growth for shareholders, build it. >> it goes back to the original vision. both on quality, the less resurfaced -- every vehicle that we sell helps the cost. so i think it's a great model that's different.
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>> i know from speaking to -- they have to put a new plan in the midwest, but we're not going to tell you why. >> clearly to improve our quality and material, absolutely technology. >> you're hiring in many places. >> i think it's one of the most exciting things. we've gone through the deepest rescission we've had. and we are now over the next couple of years, hire another 12,000 employees. they're just great jobs and great careers and we, ford and the united states, are competing at the best companies in the world and that's so neat. >> one last question. i know you worked at boeing and turned boeing around. i asked him, dreamliner.
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did you ever want to give up? ford, the worst time to come in. you brilliantly refinanced. but did you ever think it's too hard? i can't do it? did you ever have that dauoubt? >> never. i believe in talented people working together and when you have a compelling decision, everybody's involved, it's only going to turn out great. >> is that the motto or the american way or both? >> i think it's the american way and it's the way we all ought to be thinking. >> i totally agree with you on this. i know that we don't want to distance the stock, but you know what? pretty good stock, too. president and ceo of ford motor company. back after the break.
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lynn in wisconsin. lynn? >> yes, boo-yah, jim, from wisconsin. >> one of the great towns on earth. what's going on. >> ocf! man, that thing has been a horse. can it continue? i don't know. i thought perhaps it would run out of steam, but it's got plenty in the pipe. let's buy. evel evan. >> boo-yah from annapolis, maryland. >> it's working. the index is now over 1100. i can't believe it. i'll stick with that. joey in connecticut. joey? >> boo-yah, dr. cramer. >> thank you. >> how you doing? >> all right. how are you? >> pretty good. the stock i wanted to ask you about, just a few weeks ago released an anti-obesity drug into the market. on one of the signs, looks like it's a pretty good bet.
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arena pharmaceuticals. >> i thought it would pop on the ama news about obesity. i don't really have an opinion. it's not a buy for me. let's go to jim in new york. jim? >> hey, jim. thanks for taking my call. >> no problem. >> a yr. >> i liked this on the beginning, dead wrong. got crushed in. now, the incredible backlog in airlines of what we learned from jim, can't get a 787 until 2019. those guys are right. joe in indiana. joe? >> hi, jim, thanks for taking my call. my stock is bds. >> well, you know, it has been a favorite of mine for ages. we've often liked barr, becton dixon. i say buy. it's good. it's in the sweet spot. jim in north carolina. jim? >> hey, jim cramer. appreciate your show. >> i got a question on the clmt.
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you recommended it a little over a year ago. i bought it at 22.50. sold it not too long ago in 38. it's dropped back down. it looks to me like a pretty good stock. >> i agree. any that yield more than 6. ings it's fine. >> boo-yah, jim cramer. >> wow, i'm liking that stuttering boo-yah. what's going on? >> thank you. >> what's your take on adn? buy, sell or hold? >> i got to get dave on because boy, ever since they had that restasis challenge, it's worried me and until i get dave on, i am afraid to pull the trigger. dave in florida, dave? >> boo-yah from tampa. >> yeah. >> i bought a -- back in may on the pullback following the earnings. i like the stock and was thinking about adding to my position.
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>> zoic tech. free works and sanddisk works. you have my blessing to buy that. buy, buy, buy. ladies and gentlemen, this is the con clooclusion of the ligh round. ♪ [ indistinct shouting ] [ male announcer ] time and sales data. split-second stats. [ indistinct shouting ] ♪ it's so close to the options floor... [ indistinct shouting, bell dinging ] ...you'll bust your brain box. ♪ all on thinkorswim from td ameritrade. ♪
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is it a dream or nightmare? revising growth forecast, riots in brazil. these weren't portugal or greece or cyprus. we're talking about used markets, indonesia, pretty much crashed as money came out. these were very real threats to the bull markets. turmoil around around the globe, not even bonds. but look what's happened since that. on the verge of causing a collapse. actually flooded with liquidity. expect a cue. a corrupt one. now though the government's making noises and cleaning up its act and taxes the rich and riots have lessened in intensity. philippi
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philippine's had its best rally ever, however no change like the federal reserve. looks like they called every news outlet in the world. go to the "wall street journal," "new york times," "washington post," us, whatever. i was thinking they may have checked in with espn. ben bernanke, he could go all the way. the result, we got a market that can recover. use the international pressure for now and the fed seems to realize its actions had real consequences that may have slowed the two engines that produced the most real job growth here in america. can we really not worry about brazil? it's a huge market. and this once again emerging market, consider what happened. after a couple of days, reaching for yield overseas because our market doesn't give you enough. don't try to swim through the fences and just accept the fact that in the end, there's no place like home. stick with cramer. i want to make things more secure.
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[ whirring ] [ dog barks ] i want to treat more dogs. ♪ our business needs more cases. [ male announcer ] where do you want to take your business? i need help selling art. [ male announcer ] from broadband to web hosting to mobile apps, small business solutions from at&t have the security you need to get you there. call us. we can show you how at&t solutions can help you do what you do... even better. ♪
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(announcer) at scottrade, our.. cexactly how they want.t with scottrade's online banking, i get one view of my bank and brokerage accounts with one login... to easily move my money when i need to. plus, when i call my local scottrade office, i can talk to someone who knows how i trade. because i don't trade like everybody. i trade like me. i'm with scottrade. (announcer) scottrade. awarded five-stars from smartmoney magazine.
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it's lots of things. all waking up. connecting to the global phenomenon we call the internet of everything. ♪ it's going to be amazing. and exciting. and maybe, most remarkably, not that far away. we're going to wake the world up. and watch, with eyes wide, as it gets to work. cisco. tomorrow starts here. okay, smooth talking targets a u.s. army sniper home from the war.
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i wouldn't mess with a sniper. tune in to a new "american greed" tonight. i want to thank the iconic ceos, great americans. i'm jim cramer and i will see you tomorrow. will see you tomorrow! another big triple digit day for the stock markets, but thankfully, the headliner right now is gold, falling below $1200 an ounce for the first time in three years. it's a deflationary signal that's telling the fed not to tighten and here's a question, are all those people who invested in gold coins now in big trouble? now on to interest rates, will the reese enter 1% rise in interest rates smack businesses and consumers in housing and car sales? we'll talk to actual business owners who are on the front lines. >> speaking of the front lines, we've got a response to president obama's war on coal.
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